INTHEBLACK November 2025 - Magazine - Page 46
F E AT U R E
“With the rise of integrated and sustainability reporting,
we now have frameworks that allow organisations to
disclose information that’s material but not necessarily
financial in nature. This opens the door to a more holistic
view of intangible assets.”
RAM SUBRAMANIAN, CPA AUSTRALIA
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46 INTHEBLACK November 2025
“Improving intangible assets disclosures
can lead to better investment decisions,
improved risk management and increased
competitiveness in our markets.”
A survey conducted by IPOS reveals that
four out of five enterprises in Singapore want
more opportunities to use their intangible
assets to help grow their business, including
to obtain financing.
Singapore is not alone in this. The UK
Endorsement Board (UKEB), the United
Kingdom’s national standard setter for
international accounting standards, has
initiated its own research project on
accounting for intangible assets.
Without reaching any formal conclusions
to date, UKEB has acknowledged the
growing importance of intangible assets
in underpinning the growth of UK
companies and describes its research
as a “once-in-a-generation opportunity
for change”.
A WAY FORWARD IN VIEW
The European Financial Reporting Advisory
Group (EFRAG) foreshadowed the IASB’s
current review of IAS 38 with the 2021
publication of Better Information on
Intangibles: Which is the best way to go?
followed by the release of its recommendations
and feedback statement in 2023.
EFRAG recommended that the IASB
conduct a review with the aim to better
reflect the ever-increasing importance
of intangible assets, improve comparability
between companies, and address emerging
types of transactions and assets, including
emissions trading rights and crypto assets.
CPA Australia’s research paper, The
Horizons of Financial Reporting — Part 2:
Investor perspectives and measurement
uncertainty, has found that investors support
expanded reporting of intangible assets
in financial statements, providing standardised
measurement techniques can be established
and transparently communicated in
note disclosures.
Ram Subramanian, financial reporting
lead, policy & advocacy at CPA Australia,
says the solution to intangible assets
reporting may not lie entirely within
financial statements themselves but involve
a combination of financial statements and
sustainability information.
“The way accounting is structured creates
a threshold for an asset to be recognised,”
Subramanian says. “I can see some serious
challenges for that asset threshold to be met
by certain intangible assets such as brands,
internally generated intellectual property
or proprietary data.
“The answer may be elsewhere, outside
of traditional financial statements. With the
rise of integrated and sustainability reporting,
we now have frameworks that allow
organisations to disclose information that’s
material but not necessarily financial
in nature. This opens the door to a more
holistic view of intangible assets.
“Ultimately, the accounting standards we
use today were not designed for the digital
age. While it may take decades for them
to evolve, that doesn’t mean we cannot start
bridging the gap now.” ■
